FASB Seeks Feedback on Options Proposal

U.S. accounting-rule makers asked for feedback Monday on a proposal by an international accounting standards board to force companies to expense stock options, reopening a debate on a thorny topic that has much of corporate America already up in arms.

The Financial Accounting Standards Board is asking for comment on an International Accounting Standards Board proposal issued this month on options expensing.

The move by the London-based IASB, which is developing global accounting rules, would force companies to treat stock option costs as regular business costs and as a result threatens to depress corporate profits.

U.S. companies have fought bitterly against the move over the years. However, a number of big companies announced this summer that they would voluntarily expense stock options in a bid to restore investor confidence shattered by accounting scandals.

Under current U.S. accounting rules, companies may treat stock options as an expense or simply disclose the cost in the footnotes of their annual report.

FASB, which will continue to write accounting rules even after the U.S. accounting oversight board is up and running, is in favor of a policy requiring companies to expense stock options. But FASB was beaten back by politicians and corporate lobbyists when it tried to introduce such a rule in the mid-1990s.

FASB will solicit comments until Feb. 1.